tv Forbes on FOX FOX News August 6, 2011 8:00am-8:30am PDT
>> all right. neal vavito. >> and saudies are the first talking about the credit downgrade and they didn't like it china thinking much of the same and criticizing the country for reckless spend urging we get our act together . republicans go further and suggesting that tim geithner pack his bags and get out. the president is so inclined to stay quiet. the president didn't mention the downgrade in the weekly
address today . gop candidate michelle bachmann. congresswoman, what do you think? >> good morning, neal. it is a historic week as you said all morn unprecedented the doubling ofhe national debt in five years and stock market failure and now the ratings downgrade and despite all that no statement from the president of the united states. potentially most historic news in 80 years and where is the president he left for camp david and hasn't been heard of him since. i led against raising the debt ceilingly. that's what the markets told us and what the american people wanted and the president refuse to lin to them. he has to come up with a new deal to restore the market in the nation and address the nation from the white house.
and he needs to demonstrate to the country that he is unwilling. he needs to stop being awol on the economy. it is time to lead. this is about the country and american people. we have seen this morning, the markets went down five and half percent . rippling affect could be out there. 18 countries have better ratings than the united states? we can't have the administration's response to blame the credit rating agencies employees they have already blamed the weather and earthquakes and strong head winds of the economy. they can't do that anymore. now they have to lead and that is why the president has to come back to the white house from camp david and speak to the american people and peek to the markets and speak to the international community.
>> he keeps speaking to the american people. you think he is saying the wrong thing. and i spoke to you in washington. and the deal was palt row and you mentioned we were adding 7 trillion to the debt and you said something profound at the time. the credit agencies will be angry than a deal like that or no deal at all. you were right. now, i wondering if we stick to the deal and go back and tear it up. >> we have to tear it up and do a new deal. you can't fool the markets. the markets have said this deal stinks as i said all along. the credit rating agencies said look politicians can pat each other on the back and president obama can pat himself on the back. credit rating agencis and markets say this is another 2.1 or 2.4 trillion in debt
and we are not realiically cutting the spend getting the house in order and now international markets are paying attention. i called on the president to fire tim geithner and come up with a plan. he needs to peek to the nation, neal, before the markets open. >> congressman, if the replacement was somebody leak jon corzine. >> i would like to see him replaced with someone who gets the economy and understands the importance of cutting government spending. that's what we need. someone who understands we have to get our fiscal house in order. fantasy economics are a proven failure. he passed the wrong vision and he needs to put machine in that truly understands the market and get it is the reality or job creation. >> harris:
-- >> congressman bachmann she said the markets would do what they did if we got a bad deal. we have dick on the phone with us. what happened? >> heyneal, i think the market on friday was telegraphing a downgrade as you saw the volatility. i think you will see weakness x. there will be traditionally the nervous nelies who sell at the bottom and buy at the top. there is a therapy in what happened here . a message to the markets and political leadership that three stooges' approach to running this country's finances is not going to be tolerated and rather than tearing up the agreement
that's been met. i think you have to add to it and adding to it means saying that the net incremental addition of debt is unacceptable. >> i talked to someone who had been saying, now we are saying it is a slow down and manage bad global going on. we fear it could be a melt down . in this environment regardless, for any government to start even more aggressively cutting spending would be bad. what do you say to that? >> i think the approach has to be from the left and right side of the balance sheet. you have to look at how you raise revenues. you create growth and obviously by raising the taxes, but not raising taxes for purposes of redistribution of wealth but to plug the hole. i think you have to take the
approach of how do you collapse the tax code and spread it and get people to invest in this country. there is two and half trillion sitting off shore on the balance sheets of american corporation. give them a tax holiday provided they bring it back and create if you will a larger employment pool in the united states. dollar for dollar. say to the american corporation that has hundreds of billions or trillions sitting off shore. bring it back and we'll give you a holiday provided you had a head count here in the united states. at the same time say to the top bracket. yeah, we'll let you pay more but dedicated it to debt reduction and then look at the pending side. it is off of the charts.
you got to grap it by the -- the choke hold we raised the debt limit and we'll cut spending and we have done nothing. basically we have done 300 billion net cut. that is not going to make it, neal. we have to say across the spectrum. you have a budget of a dollar and you can spend nen cents of that dollar. that three percent would be significant. if you spread it across. now the leadership has to say, i don't want to fire the fire commissioner in the middle of a five-star blaze here on the one hand. on the other hand, if tim geithner chooses to go, you got to bring someone in. >> jon corsign. >> he is a great man. but jon is a politician at this juncture. i think you bring in a guy
like jack welch who looks at both sides aisle. >> what about you? >> neal, america deserves better. jack welch would be better. >> dick grasso always a pleasure. >> i love you. >> first snap shot of the market will come before the stock market begins to trade. it begins with the futures market and trade and things like the chicago mercan tile. my next guy runs that place. terry, what are you bracing for? >> well, you know, neal, i am not sure. this came fast and furious and it will be a interesting session starting tomorrow evening with the asian markets and the futures markets starting here in the united states and we'll get a bits of a sense of how things are going to be on monday.
it is hard to predict. >> we know that fast and dangerous times. it is just the number of people and number -- are you prepared for what could be a record onslaught. i don't know whether to buy or sale or both sides in >> we are, neal. we have done record volume. the cme group, and most global institution and people on the ground who have our systems in over a hundred countries throughout the world. we are very, very prepared for a volume surge that comes our way and here to facilitate the risk. >> normally people are flocking to gold and other precious metals and wheat and corn and barley and soy beans. they have inflationary price.
people could be convinced a slow down is coming, what do you think. >> it is not my. >> i like to put you on the spot and embarrass you. >> that's the reason i like to come on. i think i agree with my friend. we have seen a lot of people trying to chase whether it is up or down and i county see that scen yarrow is changing much. and it is s&p 500 and market failed mis and people are still going to flock to u.s. treasuries. and regardless of trading futures and commodities and stocks and treasuries. that there is just a sense that we are heading back in to
something bad? regardless of how you play that, that is the reality behind that. >> i don't, neal. i think that businesses seem healthy from a balance sheet perspective . they are concerned about where washington may or may not go . regulations is over the market place . get more clarity . so businesses can continue to expand. i am a believer of keeping corporate taxes low. that will help draw the unemployment number down . for america in spending. american consumer started to borrow significantly. it is disturbing. where were the cret rating agencies in 2007 when there
was no business of triple a . all of the sudden downgrade country. it is easier to downgrade a country than a business. i find it disturbing. i think the market place looks fairly good and cooler heads will prevail and we'll come out of this stronger. >> you have a crazy weekend. i appreciate you taking time. load up on the red bull. you will have a long day tomorrow. >> thank you, neal. >> and all right. we were downgraded for spending too much and now democrats are calling for more spending? and billionaire oil tycoon. bigger beating than stocks and could that be the silver lining for us? 43. vietnam, 1967. i got mine in iraq, 2003. u.s.a.a. autonsurance is often handed down from generation to generation, because it offers a superior level of protection
a rating unit of s&p 500, the firm that downgraded the debt . coming to us and talking to us. what was behind the downgrade and what it means going forward and concerns about any that it is standing out alone . other credit rating agencies are not acting in concert. you think the s&p 500 downgrade is giving anyone a change of heart in dc. the way of our fiscal spiral is more. more spending you argue we didn't do enough? >> the president worked with john boehner . i want to compliment them for coming wup a four trillion
dollar deal that included revenue. that's what with the s&p 500 needed four trillion and not two. we didn't get the revenue and cuts. but the s&p 500 told us it was a wake up call to congress to work together and comp programs and make it a real cut that hips with long-term security. i think it reenforces the president's action and peeker boehner and highlighted the tea party and hurt speaker boehner. >> wait, wait, wait. >> what about the transigents on the left. there was cutting more spending on the left. tea party held it hostage for not wanting more spending but liberal didn't want more spending. you can't have it both ways, sir some >> you talk about the left liberals. i don't know what you are
talking about exactly. we wanted a shared sacrifice and revenue as well >> wait a minute, congressman, i know you want the risk of corporation. but neither of you talked about the 51 percent of the americans not paying income taxes at all. >> most of those don't have money to pay. >> that's fine. but it cannot be 51 percent of america. >> that is not the issue. >> yes, it is. but congressman it is the issue. you are loading a red herring when you say in the issue of fairness that corporations have to pay more . leaving aside that anyone should pay more for the questionable performance. why do you leave out the 51 percent of the americans who don't pay taxes at all. >> i don't know that your februarys are accurate. most of them are low income
people. >> it is from the i.r.s. books and quoted by the congressional budget office itself pay no income taxes. i agree with you, some of them might not be in the position to pay taxes at all. >> but given your statement and taking it as a given we need tax reform. but tax reform should include revenues. >> address revenues. before you demand one group pay more. get everyone to get skin in the game. >> people who have the money are the ones that benefited from this economy. >> you keep hitting on the same group and tearing up the group. >> they have the money. >> that's what s&p is saying. you are hitting up with the same group and leave half of the people out television entirely. >> are you saying willie suton should go to the pawn shops.
that's why willie suton went to the bank. >> presumably you are. >> i am neal and neal with standard and poors. it needds to be balance revenue. >> it is not balanced when you call a group out. congressman, i wish we had more time. >> there was no revenue in this at all. >> senator. we'll be back after i beg you to stop. we'll have more including the guy behind the downgrade. there is a way to profit off of it big-time. ricans aren't getting enough whole grain. but actually, it's never been easier to get the whole grain you want from your favorite big g cereals. from cheerios to lucky charms, there's whole grain in every box. make sure to look for the white check.
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credit downgrade. joining me in the flesh. boone, what do you think happening now? >> on what oil or the market. >> oil first. >> you are down $11 a week and down 20 centos natural gas. but that is not the fiscal market and the oil will come back. supply is tight and demand is good around the world. you will be back up here. it won't be a snap back but you will be back to $95 by the end of the year and you will get into next year, and i am now talking about brent north sea. >> there is a huge difference of price. >> right. >> what about the fear of the global slow down that impact the price of oil obviously in that event and that that could sort of boomerang in the
forecast. what do you think? >> it is a low down because they downgraded our debt? >> long before the downgrade yesterday. you saw what is going on in the market. it is economic numbers and disarray we are getting. something is coming and not a slow down, maybe just a dip. but something. what do you make of that? >> you had a pretty good dip. i feel like demand is good and china growing eight or nine percent and there is good demand arod the world. but don't forget, when you are producing 90 million barrels oil in the day, it declined annually six or seb seven percent. 90 million barretts a day. you have to add back six or seven millions barrels of oil that. is not easy to do . people ignore the declines of
production. production is mature and saudies at 97, they are doing all they can do. that's it for them. >> boone, you are telling all of those looking forward to tumbling gasoline prices at the pump and that is a bright spot that they may be getting ahead of themselves? >> yeah, you are going to move back up to four dollars a gallon and may take you three or four month to get there. but first quarter of 12, is maybe judgment day. you could spike in that period. first quarter or second quarter. it will happen next year. >> boone, thank you for stopping by. >> you can't don't care about me on this reduction in our credit rating? >> i do. what do you think? >> let me tell you, it is the
worst performance i have seen for congress to go through there and give you a trillion write down. s&p told you what was going to happen. don't ever crowd a professional that has protect credibility and s&p had to protect their credibility. it was a downgrade and a sync, h. get an energy plan for america. >> okay, thank you, boon, boone pickens. as boone pointed out. we'll talk to john chambers hidded had of the s&p committee that was a wrenching call to downgrade the credit rating. the message from s&p not just the size of the debt plan but the speed of the cuts. lizzie, what was the issue? >> it was long-time fiscal
outlook for the u.s.. s&p said we are not considering over the 10 year time frame. s&p could move to downgrade to double a status in two years time. behind the scenes, there was an behind of the action. s&p went to the full committee and got the officials in europe to concur hat it needed to move to double a plus . so what you are seeing s&p was committed to a downgrade regardless of what the error was. why? the fiscal picture and dc and infighting that they are calling detrimental to the fiscal out look is not good and interest rates could spike and the economy could weaken further. one final point. treasury officials and federal reserve officials and primary dealers who met on august 3rd essentially said they did